Kira Gusterson heard rumors of a “Pilbara tax” before moving to the iron ore mining region of northern Western Australia.
It is the colloquial term used to describe the exacerbated cost of living in the region flooded with money from the commodities sector.
The vast Pilbara region of northern WA has an annual economic output of over $100 billion, attributed to the iron ore, gas and other raw materials mined each year.
But not everyone who lives in northern cities gets into the resource sector, and those who don’t find the dollar just don’t get that far.
“Rent is definitely the biggest killer…I think that was the biggest shock to me when I moved in,” Ms Gusterson said.
“I was aware I was going to be moving to a mining town, but I don’t think it really hit me until I got here, and I started meeting people who were in positions that had significantly more benefits in the mining industry, from housing to general wages.”
Ms Gusterson moved to Karratha, 1,500 km north of Perth, to gain experience in regional work and a job in health research, but soon faced a skyrocketing cost of living.
This is coupled with a lack of housing supply, pushing the median price for a two-bedroom rental in the Pilbara to $635 per week, according to the latest data from the Real Estate Institute of WA.
People across Australia are facing increases in the cost of living, but this is being felt strongly in remote and northern Australia.
Nyamal elder Linda Doogiebee-Dridi lives in the iron ore exporting powerhouse of Port Hedland, where she says housing has reached a crisis point.
The Pilbara leader is calling for open and collective conversations involving major players such as the government and mining companies to find a better way forward.
“We need to find a middle ground where everyone can be financially comfortable and people can afford to rent a house,” Ms Doogiebee-Dridi said.
Danielle Black, coordinator of the Salvation Army in Karratha, says high wages are a way of life for many in Pilbara, but it drives up the cost of goods and services for everyone.
“That pay gap in Karratha has gotten so much worse,” she said.
“We have people who are barely making ends meet and maybe even on the edge of the poverty line or even below the poverty line, and then we have these huge wages that are standard.”
To manage the high cost of living, many Pilbara residents have trained themselves to be on the lookout for bargains.
Karratha resident Peter Redding often looks through the cheap fridge at his local Woolies.
He recently picked up a whole choke for $1.16.
“Right place, right time,” said Mr. Redding.
“That made for about three meals.”
Warmth and job prospects attracted Mr. Redding to the Pilbara region, but after five years working in Karratha ranging from gardening to road construction, he became unemployed due to an accident at work.
Now Mr. Redding lives in Karratha – where a haircut costs $50 – at about $500 a week.
For him, surviving on a tight income was a matter of budgeting well and adjusting his spending habits.
“All those little things can help the budget and make life a little better,” Redding said.
“Sometimes we get caught in the trap of overspending when we work and make good money and when something like an injury happens you kind of get caught up in it.”
“You just have to live within what you have. That’s the unfortunate thing about living in a prosperous city.”
The curse of natural resources
Jose Enrique Garcilazo, deputy chief of the Organization for Economic Co-operation and Development’s (OECD) regional and rural policy unit, says the cost-of-living pressures visible in the Pilbara are common in places that specialize in mining and extractive industries.
“When you have something like mining that is so profitable and produces so much wealth, it discourages other avenues of development,” Garcilazo said.
This was known as the natural resource curse, he said.
It also caused the “Dutch disease effect”, where some of the people who worked in mining earned a lot of money and could afford housing, which drove up the cost of housing.
“That’s good for the mines and the mining industry, but it’s not good for the rest of the economy that operates in these places and generates inequality,” Garcilazo said.
Mining can have a lifespan of 10 years or 100 years, but it was temporary, he said, so it was encouraging questions about diversification.
With mining expected to be a major economic driver in the region for years to come, residents are well aware that there is little chance of an early relaxation of the “Pilbara tax”.
Those in need can call the Karratha Salvation Army emergency hotline on 0438 727 804 or the WA Salvation Army line on 08 6210 3288.